Change of tune?

You know it's really getting sad when the media equates a reduced rate of credit growth in Canada to "people getting the message" on changing their spending habits. Instead of pointing out many Canadians just can't get any more credit, they try to make Canadians think they've heard the message and they're voluntarily slowing down their free-money spending binge. OK, sure, whatever.

Key points:

• Mortgages outstanding are still rising at almost 7 per cent, year over year, but a monthly trend indicates the rate seen during the recession.
• Mortgage arrears appear to have peaked, though they're stabilizing at twice the pace in the recession. That's still below the rates of past slumps.
• Lines of credit are growing at 0.3 per cent a month, the slowest since 2007.
• Debt is still rising at a pace that eclipses income, but not assets.
• Debt interest payments now represent 7.2 per cent of disposable income, the lowest since mid-2006. (Think this might be because interest rates are the lowest since mid-2006? Rocket meet scientist)
• Consumer bankruptcies are "in a clear downward trend."
• There's a similar trend in delinquencies on consumer loans.
  

Emphasis mine. There's a reason why spending and borrowing are still growing, but at a slower rate than a year ago: the taps are slowly being turned off, interest rates are very slightly higher than they were one year ago and the pool of spenders are at or near the maximum in terms of their available credit. The situation isn't "getting better" because tapped-out consumers are "heeding the warnings."

In the interest of balance, it is true that asset growth is outpacing debt accumulation. You can thank a very robust stock market and a rebound in housing prices for this--both markets grew abnormally fast over the past 12 months, so this little indicator should be taken for what it is, not used to justify current debt accumulation trends.

The last few puffs into a balloon always seem to feel slower than the first don't they?